Martha B's Has Total Assets of $1,750

Multiple Choice

Martha B's has total assets of $1,750. These assets are expected to increase in value to either $1,800 or $2,400 by next year. The company has a pure discount bond outstanding with a face value of $2,000. This bond matures in one year. Currently, Treasury bills are yielding 6 percent. What is the value of the equity in this firm?

A) $16.98
B) $34.59
C) $36.67
D) $37.08
E) $51.89